Many retirees may have the cash on hand to buy a home, but taking out a mortgage is the better financial choice.
The New York Times reports that 42 percent of households headed by someone age 65 to 74 has home-secured debt, a share that has risen from 18.5 percent in 1992 and 32 percent in 2004.
Mortgages allow older adults to use their savings on other purposes. Low interest rates are a sweetener. Lenders don’t mind giving mortgages to retirees as long as they have assets or some form of monthly income.
As the Baby Boomer population continues to age and migrate toward new homes, experts believe the number of mortgages for older adults will rise.